"What would the neighborhood do without you?" said Darlene Gillespie ,left, to Cassandra Logan as she is rung up. Logan's Kids Resale in St. Louis has not heard back from the Economic Injury Disaster Loan (EIDL) since Logan applied in March, forcing Logan to find other ways to make ends meet. Businesses in St. Louis County received funds but not Logan's because her business is in the city. "When I heard about what the county got as opposed to what we got, I was really pissed off to the highest level," Logan said. Photo by Chris Kohley, ckohley@post-dispatch.com.

ST. LOUIS — An arm of the St. Louis Development Corp. will distribute $4 million in small business grants set aside from the city’s $35.3 million share of federal CARES Act funding.

The St. Louis Local Development Company voted Thursday to begin disbursing the $5,000 grants, which businesses with fewer than 25 employees can apply for through the SLDC’s website. Nonprofits, law firms, real estate agents and other professional service providers are not eligible. Half of the money is earmarked for the poorest parts of the city, generally the north side and southeast neighborhoods.

A five-person committee of SLDC employees appointed by director Otis Williams will review and approve grant requests.

Also Thursday, the Local Development Co. eased restrictions on businesses applying for financing through its two revolving loan funds, both established decades ago with federal money. The looser requirements, which will be in effect until May, are an effort by the U.S. Economic Development Administration to help businesses impacted by the pandemic get credit more quickly.

The changes will allow the funds to waive the requirement that borrowers must leverage $2 in private investment for every $1 of loan money they receive. The city’s loan funds will also be able to lend without borrowers demonstrating that private financing isn’t available on the same terms. The minimum loan amount will be lowered to $10,000 from $30,000.

The Local Development Co. also agreed to cut its interest rate on the loans in half to 2%. Williams told the board that was important because the perception among some in the community is that “this board is no better than a bank.”

Tim Bohnert of the Local Development Co. said that the loans still require collateral and that underwriting standards won’t change otherwise.

One of the funds has made 201 loans worth $15 million since its establishment in 1984. The other, a regional fund geared toward defense companies, has made 18 loans worth $1.3 million since it was created in 1992.

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